VirginiaHB15132026 Regular SessionHouseWALLET

Qualified self-settled spendthrift trusts; disbursements, powers of trustee.

Sponsored By: James A. "Jay" Leftwich (Republican)

Signed by Governor

Summary

Qualified self-settled spendthrift trusts; disbursements; powers of trustee. Provides that a trustee may reimburse a settlor of a trust from the income or principal of such trust for various forms of tax liability in certain circumstances and in accordance with the Internal Revenue Code except as the terms of the trust provide otherwise. The bill also provides that a trustee shall not have the power to make such a reimbursement under certain conditions unless the terms of the trust expressly provide otherwise. The bill also removes redundant language governing the order in which a new qualified trustee may be appointed in the case of a vacancy.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 3 benefits, 0 costs, 0 mixed.

More creditor protection for trust creators

Virginia lets trust creators keep the right to reject distributions without losing qualified self-settled spendthrift trust status. The trust must remain irrevocable and have a qualified trustee when it can pay its creator. A creator’s qualified interest—payments left entirely to an independent qualified trustee—receives an exemption from the usual settlor-creditor rule. That rule still applies to the creator’s other trust interests. Keeping a qualified interest or receiving nothing in return does not alone make a covered transfer fraudulent. Creditors retain other grounds for challenges, including transfers that leave the creator unable to pay debts. Covered actions to undo transfers or enforce claims existing on the transfer date have a five-year deadline. Each later transfer has its own deadline and does not determine an earlier claim’s validity; distributions count against the latest transfer. When administration moves to Virginia, earlier assets count as transferred when the trust first meets Virginia’s qualification requirements.

Trust money can repay creators’ taxes

Trustees can choose to repay income taxes charged to trust creators treated as owning trust assets for tax purposes. Payments can come from trust income or principal and go to the creator or tax agency. Trust terms can prohibit repayment. For irrevocable trusts, related or subordinate trustees cannot make repayments unless the trust terms expressly allow them. Repayments cannot harm a federal tax benefit unless expressly allowed, and receiving repayment alone does not make the trust revocable.

Legal protection for trust advisers

The law bars trust-related claims against trustees, trust advisers, trust directors, and people who help create or fund qualifying trusts. This includes people who counsel, draft, prepare, or execute the trust or transfer assets into it. The bar applies to creditors and other people. Creditors retain only the transfer-challenge rights provided by the law.

Sponsors & Cosponsors

Sponsor

  • James A. "Jay" Leftwich

    Republican • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 183 • No: 0

Senate vote • 3/9/2026

Constitutional reading dispensed Block Vote (on 2nd reading)

Yes: 40 • No: 0

Senate vote • 3/9/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 3/5/2026

Reported from Courts of Justice

Yes: 14 • No: 0

House vote • 2/17/2026

Read third time and passed House Block Vote

Yes: 97 • No: 0

House vote • 2/11/2026

Reported from Courts of Justice

Yes: 22 • No: 0

House vote • 2/9/2026

Subcommittee recommends reporting

Yes: 10 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP0476)

    4/8/2026Governor
  2. Approved by Governor-Chapter 476 (effective 7/1/2026)

    4/8/2026Governor
  3. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/31/2026Governor
  4. Enrolled Bill communicated to Governor on March 31, 2026

    3/31/2026House
  5. Signed by Speaker

    3/31/2026House
  6. Bill text as passed House and Senate (HB1513ER)

    3/30/2026House
  7. Enrolled

    3/30/2026House
  8. Signed by President

    3/30/2026Senate
  9. Passed Senate Block Vote (40-Y 0-N 0-A)

    3/10/2026Senate
  10. Read third time

    3/10/2026Senate
  11. Passed by for the day Block Vote (Voice Vote)

    3/9/2026Senate
  12. Constitutional reading dispensed Block Vote (on 2nd reading) (40-Y 0-N 0-A)

    3/9/2026Senate
  13. Rules suspended

    3/9/2026Senate
  14. Reported from Courts of Justice (14-Y 0-N)

    3/5/2026Senate
  15. Referred to Committee for Courts of Justice

    2/18/2026Senate
  16. Constitutional reading dispensed (on 1st reading)

    2/18/2026Senate
  17. Read third time and passed House Block Vote (97-Y 0-N 0-A)

    2/17/2026House
  18. Read second time and engrossed

    2/16/2026House
  19. Read first time

    2/13/2026House
  20. Reported from Courts of Justice (22-Y 0-N)

    2/11/2026House
  21. Subcommittee recommends reporting (10-Y 0-N)

    2/9/2026House
  22. Assigned HCJ sub: Civil

    2/5/2026House
  23. Referred to Committee for Courts of Justice

    1/23/2026House
  24. Presented and ordered printed 26103490D

    1/23/2026House

Bill Text

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